323 P.3d 604
Utah Ct. App.2014Background
- In 1997 John Clark (on behalf of Clark Properties) borrowed about $200,000 from Lenders (Cook & Merrill), secured by a trust deed on two parcels including Lot 3 (Deer Run) and a Kaysville parcel. Barnes Bank held a senior deed on the Kaysville parcel.
- On the morning of a Barnes Bank foreclosure sale, Clark executed a handwritten Foreclosure and Redemption Agreement (FRA) under which Clark would pay Barnes Bank; as security Clark gave quitclaim deeds for Lot 307 and Lot 3 to Lenders. The FRA allowed recording the Lot 3 deed only if Lenders had to bid their note at the foreclosure.
- Turville paid off Barnes Bank before the sale; the foreclosure did not occur and Lenders’ deed-recording condition for Lot 3 was not triggered. Clark defaulted on the original loan; Plaintiff later purchased Lenders’ note, trust deed, and claimed rights under the quitclaim deeds.
- Plaintiff sued in 2000 to quiet title to Lot 3 and Lot 307. After a 2009 bench trial the court awarded Lot 307 to Plaintiff but ruled Plaintiff had no right to Lot 3 because Lenders were never required to bid at the foreclosure sale.
- Plaintiff then brought a new action asserting (1) an Estoppel Claim (based on Plaintiff’s later recording of the deeds and Clark’s failure to demand cancellation) and (2) an Oral Agreement Claim (that Clark orally agreed the quitclaim deeds were additional payment/collateral). The district court granted summary judgment to Clark LHS, LLC, holding the Oral Agreement claim barred by the statute of frauds (and claim preclusion); Plaintiff appeals.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether an alleged oral agreement transferring an interest in Lot 3 is barred by the statute of frauds | Clark’s oral promise is already performed because a signed, notarized, delivered, and recorded quitclaim deed exists; thus statute of frauds doesn’t apply | The oral agreement would convey an interest in land and was not reduced to a sufficient writing signed by the party conveying the land, so it is barred | Statute of frauds applies; Oral Agreement claim barred |
| Whether the quitclaim deed (or other writing) satisfied the statute of frauds writing requirement | The quitclaim deed itself is a written, signed, notarized and delivered instrument that satisfies the statute of frauds | Plaintiff failed to include the deed in the record or other admissible writing showing all essential terms, so writing requirement is not met | Writing requirement not satisfied; summary judgment affirmed |
| Whether Clark LHS is estopped from asserting the statute of frauds | Clark’s failure to demand return/cancellation of deeds and the Lenders’ cancellation of foreclosure indicate waiver/estoppel | Clark and Clark LHS litigated title for years and never expressly and unambiguously waived the statute of frauds defense | No estoppel; Clark LHS may assert statute of frauds defense |
| Whether the Estoppel Claim is precluded by prior litigation | (Plaintiff briefed insufficiently on appeal) | Defendant contends claim preclusion bars the Estoppel Claim | Appellate briefing inadequate; issue waived and district court’s claim-preclusion ruling stands |
Key Cases Cited
- Penunuri v. Sundance Partners, Ltd., 301 P.3d 984 (Utah 2013) (summary judgment standard)
- Ault v. Holden, 44 P.3d 781 (Utah 2002) (review of legal conclusions de novo)
- McLaughlin v. Schenk, 299 P.3d 1139 (Utah 2013) (view facts in light most favorable to nonmoving party)
- Spears v. Warr, 44 P.3d 742 (Utah 2002) (conveyance of real property falls within statute of frauds)
- Smith v. Osguthorpe, 58 P.3d 854 (Utah Ct. App. 2002) (writing subscribed by party to be charged is required)
- Coulter & Smith, Ltd. v. Russell, 976 P.2d 1218 (Utah Ct. App. 1999) (writing must include essential terms)
- Golden Meadows Props., LC v. Strand, 241 P.3d 375 (Utah Ct. App. 2010) (estoppel from asserting statute of frauds requires express, unambiguous waiver)